1. Social Responsibility: Definition and Debate

• Corporate Social Responsibility

• • The idea that business has social obligations above and beyond making a profit.

• • Business has an obligation to constituent groups in society other than stockholders and beyond that prescribed by law.

2. Social Responsibility: Definition and Debate (contd)

• What Does Social Responsibility Involve?

• • Voluntary action

• • • Action before lawsuits or other actions that are taken to force a firm to take action on a matter.

• • An emphasis on means, not ends

• • • How the decision to act was reached, not the decision itself.

3. Figure 3.2 A Continuum of Social Responsibility Strategies

4. Social Responsibility Strategies

• Reactive Strategy

• • Denying responsibility while striving to maintain the status quo by resisting change.

• Defensive Strategy

• • Resisting additional social responsibilities with legal and public relations tactics.

5. Social Responsibility Strategies (contd)

• Accommodation Strategy

• • Assuming social responsibility only in response to pressure from interest groups or the government.

• Proactive Strategy

• • Taking the initiative in formulating and putting in place new programs that serve as role models for industry.

6. Who Benefits from Corporate Social Responsibility?

• Altruism

• • The unselfish devotion to the interests of others.

• Research Findings

• • There is a positive correlation between industry leadership on a socially responsible issue (pollution control) and profitability.

• • Corporate social responsibility is a competitive advantage in recruiting talented people.

7. Who Benefits from Corporate Social Responsibility? (contd)

• Enlightened Self-Interest

• • A business ultimately helps itself by helping solve social problems.

• An Array of Benefits for the Organization

• • Tax-free incentives to employees.

• • Retention of talented employees.

• • Help in recruiting the talented and socially conscious.

• • Help in swaying public opinion.

• • Improved community living standards.

• • Others.

8. The Ethical Dimension of Management

• Ethics

• • The study of moral obligation involving the distinction between right and wrong.

• Business Ethics

• • The study of the complex business practices and behaviors that give rise to ethical issues in organizations.

9. Practical Lessons from Business Ethics Research: Ethical Hot Spots

• Balancing work and family

• Poor internal communications

• Poor leadership

• Work hours, work load

• Lack of management support

• Need to meet sales, budget, or profit goals

• Little or no recognition of achievements

• Company politics

• Personal financial worries

• Insufficient resources

10. Practical Lessons from Business Ethics Research (contd)

• Pressure from Above

• • The problem of superiors pressuring subordinates is widespread.

• Responding to Pressure from Above

• • Consciously avoid putting undue pressure on subordinates.

• • Be prepared to deal with excessive organization pressure.

11. Practical Lessons from Business Ethics Research (contd)

• Ambiguous Situations

• • Situations where there are no clear-cut ethical guidelines.

• • Ethical codes can help satisfy employees need for formal guidelines.

• A Call to Action

• • The deliberate and conscious actions of a manager to do the right thing is an ethical and personal matter.

12. General Ethical Principles

• Self-Interests

• Personal virtues

• Religious injunctions

• Government requirements

• Utilitarian benefits( life stance , with happiness or pleasure being of ultimate importance .)

• Universal rules

• Individual rights

• Economic efficiency

• Distributive justice(sharing limited resources from superior to subordinate)

• Contributive justice(sharing between members of same group)

13. Encouraging Ethical Conduct

• Ethics Training

• • Amoral managers: managers who are neither moral or immoral, but ethically lazy.

• • Key features of effective ethics training programs

• • • Top management support.

• • • Open discussion.

• • • A clear focus on ethical issues.

• • • Integration of ethics into the organization.

• • • A mechanism for anonymously reporting ethical violations.

• • • Reward ethical conduct.

14. Encouraging Ethical Conduct (contd)

• Whistle-Blowing

• • The reporting of perceived unethical matters.

• • Reducing the fear of retaliation against whistleblowers

• • • Anonymous hotlines and web sites

• • • Personal, confidential guidance

• Ethical Advocate

• • An ethics specialist who plays a role of critical questioner in top-managements decision-making.

• • Serves as the Board of directors social conscience.

• • Helps prevent groupthink and blind conformity

15. Encouraging Ethical Conduct (contd)

• Code of Ethics

• • Published statement of moral expectations for employee conduct

• • Requirements for an effective ethics code

• • • Must describe specific practices as unethical (e.g., kickbacks, payoffs, gifts, falsification of records, and misleading product claims).

• • • Must be firmly supported and fairly enforced by top management.